Wall Street rises on inflation data but on track for weekly losses

Ivan Schwartz
August 13, 2017

Asian stock markets slumped Friday following overnight losses on Wall Street, as President Donald Trump's bellicose remarks on North Korea prompted investors to unload shares in companies that have been on the rise.

In the political sphere, investors will be keeping a close eye on the rising tensions between North Korea and the USA on Wednesday.

Analysts said media and entertainment stocks also seemed to get caught up in the broader market drop, but emphasized it was often hard to isolate reasons behind specific stocks' movements.

Investors again sought safe-haven assets such as gold and the Swiss franc, helping gold hit a more two-month high. The tech-heavy Nasdaq composite lost 2.1 per cent to 6,216.87.

President Donald Trump said on Tuesday that US threats from Pyongyang would be met with "fire and fury", which prompted North Korea to say it was considering plans for a missile strike on the USA pacific territory of Guam.

North Korea said it was completing plans to fire four intermediate-range missiles over Japan to land near the U.S. Pacific island territory of Guam in an unusually detailed threat.

Investors have enjoyed a global stock rally with few interruptions this year, something many have attributed to the improving health of USA companies and steady global economic growth. The Russell 2000 index of smaller-company stocks ticked up 0.2% to 1,416.

Energy stocks retreated 0.5 percent, despite higher oil prices.

"Of course it's all come at a time when share markets are due for a correction, so North Korea has provided a flawless trigger", he added.

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Focusing on United Kingdom stocks, Old Mutual was among the biggest fallers after saying it was taking a "cautious" approach to the dividend despite hiking half-year profits.

Data showed USA producer prices unexpectedly fell in July, recording their biggest drop in almost a year, while another set showed the number of Americans filing for unemployment benefits unexpectedly rose last week. Humana rose $3.59, or 1.4 percent, to $253.81. Similarly certain havens, such as USA government bonds, have risen.

In European markets, the French CAC 40 was down 0.7% and Frankfurt's DAX 30 shed 1.2%. The yield on the 10-year Treasury note rose to 2.27% from 2.26%.

Materials, a sector that includes gold producers and other resource-based companies, was the lone gainer among the index's 10 main sectors, rising 0.7 per cent. Copper fell 2 cents to $2.93 a pound.

US crude oil futures settled almost 2 per cent lower at $48.59 a barrel, as Russian Federation considered a future output resumption and the Organization of the Petroleum Exporting Countries boosted its July production numbers.

At 5.00 a.m. ET, U.S. crude hovered around $49.40 per barrel, while Brent stood around $52.37. Netflix was down 1.8 per cent.

CURRENCIES: The dollar fell to 109.96 yen from 110.48 yen late Tuesday.

Sterling was also down 0.1% versus the euro at 1.104.

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